The influence of a physiologic range of palmitate concentrations (0, 0.25, 0.5, and 1.0 mmol/L) on glucose ability to modify insulin secretion, (U-14C) palmitate oxidation, and (U-14C) glucose incorporation into lipids has been studied in islets isolated from either fed or 48-hour starved rats. Palmitate potentiated the insulin response of fed islets to glucose in a particular dose-related manner. Glucose stimulated secretion was accompanied by a decreased palmitate oxidation and an increased (U-14C) glucose incorporation into di-, tri-acylglycerols, and predominantly into phospholipids. These metabolic parameters showed also a positive dependence on palmitate concentration. Starvation increased islet capacity to oxidize palmitate, rendered it insensitive to glucose inhibition, and inhibited both (U-14C) glucose incorporation into all lipid fractions and sugar induced insulin release. The stimulation of islet lipid synthesis by glucose seems to be limited by the exogenous supply of fatty acids and their rate of oxidation. As judged from (U-14C) glucose incorporation data, the rate of phospholipid biosynthesis showed a significant and positive correlation with insulin secretion. This metabolic pathway might provide islet cells with some lipid intermediates (diacylglycerol and/or specific phospholipids) that have been considered as possible mediators of the calcium messenger system.